LTC Properties Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>LTC Properties Inc. filed its Q1 2024 10-Q, detailing financial positions and equity changes.</b>

AI Summary

LTC PROPERTIES INC (LTC) filed a Quarterly Report (10-Q) with the SEC on April 29, 2024. LTC Properties Inc. reported financial results for the quarter ending March 31, 2024. The company's retained earnings stood at $43,022,000 as of March 31, 2024. Additional Paid-In Capital was $31,840,000 as of March 31, 2024. The filing details common stock activity for Q1 2024 and Q1 2023. Restricted stock grants with vesting periods and performance conditions are outlined.

Why It Matters

For investors and stakeholders tracking LTC PROPERTIES INC, this filing contains several important signals. This filing provides investors with an updated view of LTC Properties' financial health and equity structure as of the end of the first quarter of 2024. Understanding the changes in retained earnings, additional paid-in capital, and stock-based compensation is crucial for assessing the company's financial performance and shareholder value.

Risk Assessment

Risk Level: low — LTC PROPERTIES INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) with no immediate red flags or significant negative disclosures, indicating a routine update.

Analyst Insight

Review the detailed breakdown of equity accounts and stock-based compensation to understand changes in shareholder equity and potential future dilution.

Key Numbers

• 43,022,000 — Retained Earnings (As of March 31, 2024)
• 31,840,000 — Additional Paid-In Capital (As of March 31, 2024)
• 0.19 — EPS (Q1 2024)
• 0.19 — EPS (Q1 2023)

Key Players & Entities

• LTC PROPERTIES INC (company) — Filer
• 2024-03-31 (date) — Period of report
• 2024-04-29 (date) — Filing date
• 3011 TOWNSGATE ROAD (address) — Business address
• WESTLAKE VILLAGE (location) — Business address city
• CA (location) — Business address state
• 91361 (postal_code) — Business address zip
• 805-981-8655 (phone_number) — Business phone

FAQ

Industry Context

LTC Properties Inc. operates as a real estate investment trust (REIT) specializing in healthcare-related real estate. This filing pertains to its quarterly financial performance.

Regulatory Implications

As a publicly traded company, LTC Properties Inc. is subject to SEC regulations and reporting requirements, including the filing of quarterly (10-Q) and annual (10-K) reports.

What Investors Should Do

1. Analyze the balance sheet for changes in assets, liabilities, and equity compared to the previous quarter.
2. Examine the details of stock-based compensation to understand its impact on earnings per share and future share count.
3. Compare the Q1 2024 EPS of $0.19 with historical data and analyst expectations.

Key Dates

• 2024-03-31: Quarter End Date — Reporting period for the 10-Q filing.
• 2024-04-29: Filing Date — Date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This 10-Q filing provides the financial snapshot for the quarter ending March 31, 2024, updating the information previously reported in the annual 10-K and prior quarterly filings.

Filing Documents

• ltc-20240331x10q.htm (10-Q) — 3760KB
• ltc-20240331xex10d1.htm (EX-10.1) — 74KB
• ltc-20240331xex10d2.htm (EX-10.2) — 61KB
• ltc-20240331xex31d1.htm (EX-31.1) — 11KB
• ltc-20240331xex31d2.htm (EX-31.2) — 11KB
• ltc-20240331xex32.htm (EX-32) — 9KB
• ltc-20240331x10q025.jpg (GRAPHIC) — 42KB
• 0001558370-24-006117.txt (&nbsp;) — 15435KB
• ltc-20240331.xsd (EX-101.SCH) — 89KB
• ltc-20240331_cal.xml (EX-101.CAL) — 69KB
• ltc-20240331_def.xml (EX-101.DEF) — 451KB
• ltc-20240331_lab.xml (EX-101.LAB) — 672KB
• ltc-20240331_pre.xml (EX-101.PRE) — 642KB
• ltc-20240331x10q_htm.xml (XML) — 3376KB

-- Financial Information

PART I -- Financial Information Page Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Income 4 Consolidated Statements of Comprehensive Income 5 Consolidated Statements of Equity 6 Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 47 Item 4.

Controls and Procedures

Controls and Procedures 47

-- Other Information

PART II -- Other Information Item 1.

Legal Proceedings

Legal Proceedings 47 Item 1A.

Risk Factors

Risk Factors 47 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 48 Item 5. Other Information 48 Item 6. Exhibits 49 Table of Contents LTC PROPERTIES, INC. CONSOLIDATED BALANCE SHEET S (amounts in thousands, except per share) March 31, 2024 December 31, 2023 (unaudited) (audited) ASSETS Investments: Land $ 120,137 $ 121,725 Buildings and improvements 1,219,622 1,235,600 Accumulated depreciation and amortization ( 383,782 ) ( 387,751 ) Operating real estate property, net 955,977 969,574 Properties held-for-sale, net of accumulated depreciation: 2024—$ 2,773 ; 2023—$ 3,616 389 18,391 Real property investments, net 956,366 987,965 Financing receivables, net of credit loss reserve: 2024—$ 1,980 ; 2023—$ 1,980 196,010 196,032 Mortgage loans receivable, net of credit loss reserve: 2024—$ 4,845 ; 2023—$ 4,814 480,250 477,266 Real estate investments, net 1,632,626 1,661,263 Notes receivable, net of credit loss reserve: 2024—$ 605 ; 2023—$ 611 59,946 60,490 Investments in unconsolidated joint ventures 19,340 19,340 Investments, net 1,711,912 1,741,093 Other assets: Cash and cash equivalents 9,010 20,286 Debt issue costs related to revolving line of credit 1,786 1,557 Interest receivable 55,842 53,960 Straight-line rent receivable 19,075 19,626 Lease incentives 3,578 2,607 Prepaid expenses and other assets 17,192 15,969 Total assets $ 1,818,395 $ 1,855,098 LIABILITIES Revolving line of credit $ 277,050 $ 302,250 Term loans, net of debt issue costs: 2024—$ 305 ; 2023—$ 342 99,695 99,658 Senior unsecured notes, net of debt issue costs: 2024—$ 1,194 ; 2023—$ 1,251 483,466 489,409 Accrued interest 4,861 3,865 Accrued expenses and other liabilities 34,481 43,649 Total liabilities 899,553 938,831 EQUITY Stockholders' equity: Common stock: $ 0.01 par value; 60,000 shares authorized; shares is

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Genera l LTC Properties, Inc., a health care real estate investment trust ("REIT"), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. We invest primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision-making purposes. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers ("SNF"), assisted living communities ("ALF"), independent living communities ("ILF"), memory care communities ("MC") and combinations thereof. We also invest in other ("OTH") types of properties, such as land parcels, projects under development ("UDP") and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment. We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accou

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED (Unaudited) receivable in a timely manner through our quarterly review of the loan and property performance. Therefore, we elected the policy to write off accrued interest receivable by recognizing credit loss expense. As of March 31, 2024, the total balance of accrued interest receivable of $ 55,842,000 was not included in the measurement of expected credit loss. For the three months ended March 31, 2024 and 2023, we did not recognize any write-off related to accrued interest receivable. No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders. 2. Real Estate Investments Assisted living communities, independent living communities, memory care communities and combinations thereof are included in the assisted living property classification (collectively "ALF"). Any reference to the number of properties or facilities, number of units, number of beds, number of operators and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm's review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board. Owned Properties. Our owned properties are leased pursuant to non-cancelable operating leases. Each lease is a triple net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options. The majority of our leases contain provisions for specified annual increases over the rents of the prior year. The following table summarizes our investments in owned properties at March 31, 2024 (dollar amounts in thousands) : Ave

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED (Unaudited) During 2023, Brookdale Senior Living Communities, Inc. ("Brookdale") elected not to exercise its renewal option under a master lease that matured on December 31, 2023. The 35 - property assisted living portfolio was apportioned as follows (dollar amounts in thousands) : Type Number Number First Lease of of of Year Lease Commencement

Properties

Properties Units Rent Term November 2023 OK ALF 5 (1) 184 $ 960 Three years January 2024 CO, KS, OH, TX ALF 17 (2) 738 9,325 Six years January 2024 NC ALF 5 (3) 210 3,300 Six years 27 1,132 $ 13,585 Type Number Number of of of Sales Net Year sold

Properties

Properties Units Price Proceeds (4) 2023 FL ALF 4 176 $ 18,750 $ 14,310 (5) 2023 OK ALF 1 37 800 769 2023 SC ALF 3 128 8,409 8,153 ALF 8 341 $ 27,959 $ 23,232 Total 35 1,473 (1) These communities were transitioned to an existing LTC operator. The new master lease includes a purchase option that can be exercised starting in November 2027 through October 2029 if the lessee exercises its four-year extension option. Rent increases to $ 984 in the second year, and $ 1,150 in the third year. (2) These communities were re-leased to Brookdale under a new master lease. Rent escalates by approximately 2.0 % annually. The new master lease includes a purchase option that can be exercised in 2029. We also agreed to fund $ 7,200 for capital expenditures for the first two years of the lease at an initial rate of 8.0 % escalating by approximately 2.0 % annually thereafter. (3) These communities were transitioned to an operator new to us. Rent escalates by approximately 3.0 % annually. (4) Net of transaction costs and seller financing, if any. (5) We provided seller financing collateralized by two of the Florida properties, with a total of 92 units. The $ 4,000 seller-financed mortgage loan has a two-year term, with a one-year extension, at an interest rate of 8.75 % . During the three months ended March 31, 2024, a master lease covering 11 skilled nursing centers, that was scheduled to mature in January 2024, was renewed for seven months extending the maturity to August 2024. The master lease was renewed at the current annualized rent of $ 8,000,000 , or $ 4,667,000 for seven months in 2024. The centers have a total of 1,444 beds and are located in Texas. Subsequent to March 31, 2024, we executed a term sheet with the operator, to amend the master lease extending the term through December 2028. Annual rent will increase by $ 1,000,000 to $ 9,000,000 for 2024. Rent will increase to $ 9,500,000 for 2025, and $ 10,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED (Unaudited) beds across four skilled nursing centers, three in Texas and one in Wisconsin, and a behavioral health care hospital in Nevada. We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectible operator receivable balances, including straight- line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a "straight-line" basis for those customer receivable balances deemed uncollectible. We wrote-off straight-line rent receivable and lease incentives balances of $ 191,000 and $ 144,000 for the three months ended March 31, 2024 and 2023, respectively, as a result of property sales and lease terminations. We continue to take into account the current financial condition of our operators, including consideration of the impact of COVID-19, in our estimation of uncollectible accounts at March 31, 2024. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known. The following table summarizes components of our rental income for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, Rental Income 2024 2023 Contractual cash rental income $ 30,951 (1) $ 29,125 (1) Variable cash rental income 3,381 (2) 3,284 (2) Straight-line rent ( 550 ) ( 465 ) Amortization of lease incentives ( 233 ) ( 209 ) Total $ 33,549 $ 31,735 (1) Increased primarily due to $ 2,377 repayment of rent credit in connection with the sale of our interest in a consolidated joint venture ("JV), rental income from 2023 acquisitions and annual rent escalations, partially of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED (Unaudited) Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amounts in thousands): Type Number of of Gross Net Book Option

Properties

Properties Investments (1) Value Window California ALF/MC 2 $ 38,895 $ 32,542 2023-2029 Colorado/Kansas/Ohio/Texas ALF/MC 17 58,723 26,089 2029 (2) Florida SNF 3 76,669 76,669 2025-2027 Georgia/South Carolina ALF/MC 2 31,433 24,682 2027 North Carolina ALF/MC 11 121,321 121,321 2025-2028 (3) North Carolina ALF 5 14,404 6,844 2029 (4) Ohio MC 1 16,161 13,378 2024-2025 Ohio ILF/ALF/MC 1 54,758 52,946 2025-2027 Oklahoma ALF/MC 5 11,221 4,332 2027-2029 (5) Tennessee SNF 2 5,275 2,227 2023-2024 Texas SNF 4 52,726 50,036 2027-2029 (6) Total $ 481,586 $ 411,066 (1) Gross investments include previously recorded impairment losses, if any. (2) During 2023, we released 17 ALFs with a total of 738 units to Brookdale under a new six-year master lease. The new master lease commenced in January 2024 and includes a purchase option that can be exercised in 2029. See above for more information. (3) During 2023, we entered into a JV that purchased 11 ALFs and MCs with a total of 523 units and leased the communities under a 10-year master lease. The master lease provides the operator with the option to buy up to 50 % of the properties at the beginning of the third lease year, and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0 % on any portion of the properties being purchased. For more information regarding this transaction see Financing Receivables below. (4) During 2023, we transferred five ALFs with a total of 210 units from Brookdale to an operator new to us. The new master lease commenced in January 2024 and includes a purchase option that can be exercised in 2029. See above for more information. (5) During 2023, we transferred five ALFs in Oklahoma with a total of 184 units from Brookdale to an existing operator. The new master lease commenced in November 2023 and i

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED (Unaudited) Properties Held -for-Sale. The following summarizes our held-for-sale properties as of March 31, 2024 and December 31, 2023 ( dollar amounts in thousands ): Type Number Number of of of Gross Accumulated P

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View this 10-Q filing on SEC EDGAR